With spending, the irresponsible mindset of both parties is the same, albeit for different reasons.
Last week, a Republican-controlled Congress passed a two-year budget deal that makes a complete mockery of anything resembling fiscal discipline in a nation already saddled with $20.5 trillion of national debt, and an astonishing $63.8 trillion of unfunded liabilities, after subtracting the value of federal assets. For perspective sake, that shortfall equates to $260,382 for every person living in America, and 451% of the nation’s gross domestic product.
Nevertheless, courtesy of a 71-28 vote of approval in the Senate, and a 240-186 thumbs up from the House, deficit spending will likely hit $984 billion in FY 2018, and once again top $1 trillion in FY2019, paving the way to $30 trillion of national debt within the next 10 years.
Columnist Andrew Malcom spells it out, writing, “Remember Republicans’ enduring commitment over most of our lifetimes to eliminate the federal budget deficit and trim the national debt? Well, forget it.”
Forget it indeed. And it’s not just Republicans. The irresponsible mindset of both parties is the same, albeit for different reasons. Republicans want more money for the military, Democrats for the social welfare state.
Hence, the chest-puffing. “This is a great victory for our men and women in uniform. Republicans and Democrats joined together to finally give our troops the resources and our generals the certainty to plan for the future,” crowed House Speaker Paul Ryan (R-WI). “What makes Democrats proudest of this bill is that after a decade of cuts to programs that help the middle class, we have a dramatic reversal,” boasted Sen. Chuck Schumer (D-NY).
Cuts? When Bill Clinton left office, the federal debt was $5.8 trillion. When George W. Bush left office, it was $11.6 trillion. When Barack Obama left office, it was $19.5 trillion.
Moreover, most of the spending is on mandatory automatic pilot. In 2018, the federal government will spend 27% of its budget for health care, 26% for pensions (federal employees and Social Security), 22% for the military — and 8% servicing the existing debt.
That’s 82% of the entire outlay. Debt service must be paid or we’ll precipitate worldwide financial Armageddon. Moreover, despite massive spending levels, both Medicare and Social Security face insolvency over the next two decades.
How do we solve the problem? Absent serious reform, we don’t.
Unfortunately, an utter lack of seriousness rules. “Republicans believe that tax cuts and regulatory reform will negate the need for spending reductions because the first two policies will ignite the economy, allowing for economic growth to outpace debt creation (and the larger growth would also mean the more money that companies and citizens paid to the government in taxes without an actual tax increase),” explains columnist Brandon J. Wiechert. “Republicans say this was precisely what happened during the Reagan boom. The GOP is correct.”
Being correct is irrelevant, because with the exceptions of Presidents Warren G. Harding and Calvin Coolidge, every administration, from Woodrow Wilson through Barack Obama, added to the national debt. In other words, despite increased levels of revenue — including revenue increases spurred by the Kennedy, Reagan and Bush administrations’ tax cuts — spending outlays have consistently outpaced revenue intake. And they’ve done so for over a century.
Democrats? Just as in Europe, American leftists would rather dodge serious welfare state reform and instead import a younger workforce of immigrants — who also have higher birthrates than native populations — to support the increasing demands of an increasingly older native population. That several studies done on both sides of the Atlantic reveal immigration provides no net surplus to the economic pie means little to a Democrat Party with visions of securing a permanent majority of voters.
The searing irony? Like Democrats, immigrants want bigger government, which will inevitably make the problem worse.
The general public? As columnist Nathanael Blake explains, young voters with the most to lose “are often disengaged and besotted with adolescent socialist fantasies,” while retirees and near retirees who vote religiously “aren’t keen on politicians who raise taxes or cut military spending, and they will annihilate any politician who threatens their government checks and health care.”
True enough, but much of the public is also blissfully ignorant, or angrily so. For the blissful, $20 trillion of debt is little more than a chimerical number, representing a crisis that has yet to occur. Or in a more selfish sense, one that will occur “long after I’m gone” so as not to affect them in any way. For the angry, one often hears the familiar refrain about “solving” the crisis by cutting off funding “to countries that hate us,” even though the nation’s entire foreign aid budget comprises less than 1% of our annual spending.
If the public won’t make intelligent or hard choices, why should the people they vote for do so?
There was a time when the politicians tried. In 1982, President Ronald Reagan issued an executive order establishing “The Private Sector Survey on Cost Control” (PSSCC), more commonly known as the Grace Commission. It was led by industrialist J. Peter Grace, who tasked approximately 2,000 business executives with the project of getting rid of federal waste and inefficiency. Two years later, the group presented its findings to Congress: if their recommendations were followed, the government could save $424 billion over a three year period.
In 1985, the federal government spent $946.3 billion. If one simply divides the Grace Commission saving totals by three (instead of factoring in year over year increases in the budget and commensurate savings) government spending could have been reduced by approximately 14% per year. Trump has proposed a $4.4 trillion budget for this year. Fourteen percent of that comes to $616 billion.
Congress completely ignored the Grace Commission’s findings.
Nothing has changed. Thus, for example, the fact that the Pentagon can’t account for $800 million in construction project spending, or that Medicare and Medicaid fraud costs the nation approximately $120-$150 billion per year, or that a third annual “Federal Fumbles” report released last Nov. by Sen. James Lankford revealed the government wasted $473 billion on frivolous spending, still fails to resonate with our free-spending political class.
Why? Because spending “other peoples’ money” coupled with the need to get re-elected virtually guarantees indifference. “The electoral math suggests that there will be no reform or restraint except what will eventually be forced on us by the pitiless math of accounting and economics,” Blake warns.
Unless the nation demands term limits. Only genuine statesmen can save us now, and budget epitomizes the difference between them and the terminally self-interested career politicians in both parties. Republicans who routinely abandon oft-stated fiscal principles, and Democrats who never had them to begin with. That’s how you get $20.5 trillion of national debt — with no end in sight.
And as for the looming debt crisis, it will be gradual trouble until it’s sudden catastrophe.